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METRO GROUP prepares demerger into two independent, strong wholesale and retail groups

Creation of two independent, stock-listed companies as market leaders in their respective sectors

Separation of METRO GROUP into a Wholesale and Food Specialist group, and a Consumer Electronics group

Both companies with improved focus, quicker decision making processes, more flexibility and improved operational efficiency

CEO Koch: "The creation of two independent companies would be the logical next step in the transformation of our business towards more growth, customer centricity and entrepreneurship."

Aimed for completion until mid-2017

The Management Board of METRO AG is preparing the creation of two independent and sector focused companies through a demerger of the group: A Wholesale and Food Specialist group, as well as a Consumer Electronics products and services group. Both entities would become individually stock-listed, with their own distinct profile, Management and Supervisory Boards. The aim would be to give each of the companies and their respective management full control over their corporate strategies. This will further increase customer focus, accelerate growth of the businesses, simplify structures and improve time-to-market and operational excellence. Moreover, both entities would be able to independently pursue acquisition and partnership strategies, enabling them to define their own expansion strategies.

Management and Supervisory Boards will make a decision on the contemplated demerger of METRO GROUP after a period of intensive consultation and review. Should ongoing assessments prove to be positive and the shareholders vote in favor, the implementation of the demerger is aimed for mid-2017.

"Over the past years, we have successfully revitalized our core businesses while significantly strengthening our group balance sheet," said Olaf Koch, CEO of METRO AG. "Both our Wholesale and Food Specialist business as well as our Consumer Electronics business have continued to commercially improve, are on a steady successful path and are best-equipped for an independent future. Our shareholders would effectively own two well positioned market leaders, both of whom are increasingly focusing on their respective business areas and are generating more value for customers, employees and business partners."

The demerger would see METRO AG separated into two independent businesses: A Wholesale and Food Specialist group (comprising METRO, MAKRO and their associated entities as well as Real) and a Consumer Electronics products and services group (comprising Media-Saturn and its portfolio of strong formats and brands). The two businesses currently have very limited operational overlap and very limited synergies.

Subject to the approval of the respective Supervisory Boards, it is intended that the Wholesale and Food Specialist entity would be run by Olaf Koch, currently CEO of METRO AG, while the Consumer Electronics group would be headed by Pieter Haas, currently member of the Management Board of METRO AG and CEO of Media-Saturn. Other board positions have yet to be decided. The implementation of the demerger is targeted by mid-2017, subject to customary approvals. METRO AG's anchor shareholders Haniel, Schmidt-Ruthenbeck and Beisheim support the intention of METRO AG's Management Board for a demerger into two independent companies.

Jürgen Steinemann, Chairman of the Supervisory Board of METRO AG, said: "I feel very strongly that a split into two independent and focused businesses would be in the best interest of all stakeholders, as it would facilitate a significant opportunity for faster and more profitable growth. Having discussed it in great depth, I fully support the initial results of the review conducted by the Management Board."

The demerger would be executed through a spin-off of METRO Cash and Carry, Real and other related businesses and services companies from current METRO AG, which would subsequently fully focus on the consumer electronics sector under a new company name. This would enable both entities to strengthen their focus on the initiated transformation and innovation programs, while pursuing corporate development into significantly broadened spheres. It would also make the distribution and utilization of investment capital in both of the new entities clearer.

It is envisaged that METRO AG shareholders would receive shares in both companies in proportion with their existing holdings. Following final decisions by the Management Board and the Supervisory Board, shareholders would be invited to a General Meeting in order to discuss and vote on the proposed demerger. An analysis of current company structure, governance, growth opportunities, legal and tax consequences and financial aspects has shown that, from a shareholder perspective, the proposed demerger would be commercially beneficial.

The creation of two independent organizations has been made possible by the successful transformation of METRO GROUP and its business segments over the past few years. METRO Cash & Carry has delivered ten consecutive quarters of like-for-like growth and improving earnings, despite a challenging environment. Media-Saturn has achieved six consecutive quarters of like-for-like growth, an all-time high market share and strong earnings in the last fiscal year. Both businesses now have strong financial profiles and significant growth as well as value potential. Recent successes have been achieved through a strong customer focus and continued efforts to tailor the business models to local requirements. With the sale of GALERIA Kaufhof in 2015 and various other changes in the portfolio such as the sale of METRO Cash & Carry Vietnam and Real International over the past years, focus on METRO AG's core businesses has been enhanced, and the group's balance sheet strengthened, preparing the grounds for such a change.

METRO GROUP will hold a press conference today at 12:30 p.m. at the "Melia" Hotel in Düsseldorf (Inselstraße 2, 40479 Düsseldorf). It will also be broadcasted live.

METRO GROUP is one of the most important international retailing companies. It generated sales of some €59 billion in financial year 2014/15. The company operates over 2,000 locations in 29 countries and employs more than 220,000 people. The performance of METRO GROUP is based on the strength of its sales brands, which act independently on the market: METRO/MAKRO Cash & Carry, the international leader in the self-service wholesale trade; Media Markt and Saturn, the European market leader in consumer electronics retailing; and Real hypermarkets.